The Employee Free Choice Act - Case Study Example

Introduction Most of the people in our country belong to the middle manager levels or below. With a falling economy at hand, it has come to notice that the wages and salaries for these people have not risen or have in fact got a drop. Companies have also been laying down a lot of their employees. At the same time, the CXO series employees of the company continue to get increasing pay, and huge bonuses. This makes it necessary for the working people to unite with each other and bargain with their top level employers for better benefits and salary. These factors combined with the election of Barack Obama as the US President has led to an increased interest in the Employee Free Choice Act. The Employee Free Choice Act (EFCA) is a proposed law the text of which states that it attempts to “amend the National Labor Relations Act to establish an efficient system to enable employees to form, join, or assist labor organizations, to provide for mandatory injunctions for unfair labor practices during organizing efforts, and for other purposes” (The Library of Congress, 2009). This law is being considered as a big revolution in the area of labor laws. This makes it necessary to understand the present law, the way in which EFCA attempts to provide its objectives, and the various arguments in and against the law. The next part of the report deals with a brief overview of the existing law. This is followed by a brief study of the proposed law. This will be followed by arguments used by proponents and opponents of the law. The last part of the report concludes the essay by presenting the outlook of the author. The Current federal labor law: evolution & Features In the early part of 20th century, there were no special laws for labors and labor unions were subject to the same judge-made regime that would apply to any other business, or institution. During the same time, a lot of research was done on efforts to carve out special laws for laborers. This led to the emergence of a new field that was called labor laws. The National Labor Relations Act (NLRA), which is considered as the first milestone towards a unified labor law came into being in 1935. This law which was also called the Wagner Act was defended against a case of being unconstitutional in NLRB v. Jones and Laughlin Steel Co (The Oyez Project). Since then this unified law has been considered as the base and all the subsequent changes have been made to it. The Act was based on 2 principles: Union Democracy Free Negotiation It stated that if a union wins a secret ballot, it could be the exclusive representative for the firm employees. It was also laid down that in case of a selection of a union; it is necessary for both the parties to negotiate in good faith for a collective bargaining agreement. The next landmark in the development was the Taft-Hartley Act of 1947. The Act maintained that NLRA encourages employees to form unions, but if majority of the voters think that unionization is not necessary, then the interests of such a union will not be protected by NLRA. The act also laid down a series of unfair labor practices for the management as well as union conduct. It also gave an employee the right to not join the union and protect him from paying the dues. This was followed by the Landrum-Griffin Act of 1959. It focused on areas of internal union management and to control the corruption practices in the union. Employee Free Choice Act The Employee Free Act of the EFCA as it is popularly called is considered a transforming legislation in the history of labor laws. It is based on three broad principles: Increase in the penalties for unfair labor practices by employers. With a dramatic increase in use of unfair labor practices, such as illegal firing of union supporters, EFCA Proposes to build new stricter punishments to protect the union’s rights. These penalties will be in the form of either or a combination of these three, and will be applicable to any unfair practice during the organizing campaign or first contract negotiations: Civil Penalties: A fine of up to USD 20,000 per case of unfair labor practice usage. Treble Back Pay: Makes the severance amount of an employee who is fired or discriminated against 3 times the original. Mandatory Applications for Injunctive Remedies: In case of an attempt by the company to interfere with employees right during organizing camp or first contract negotiations, NLRB shall seek a federal court injunction. The Concept of Interest Arbitration: This proposal recommends the use of a Federal Mediation and Conciliation Service (FMCS) to mediate the first contract if a newly formed union and the company management fail to reach to a conclusion within the first 90 days. If still no agreement is reached within the two parties in the next 30 days, the decision is left to a third party arbitrator. The decision by the arbitrator will be final and binding on both the parties. Both the union and the company management can increase the time duration based on mutual consent. The utilization of a card-check system to authorize a union for a particular bargaining unit. Either party can use this option as a substitute for the current electoral system. It also proposes the requirement of certification of an authorized union by the National Labor Relations Board. It also proposes the board to develop a framework for authorization procedures and policies apart from confirming the validity of the signed authorities. The Proponents The Law has found it largest group of proponents in the form of Organized Labor. They argue that the current Labor Law is insufficient and has failed to protect the rights of the workers. Workers are continually intimidated, harassed or even fired during organizing campaigns. Even if the workers are able to form a successful union, they are unable to get to a fair first contract. This has resulted in the loss of bargaining power of the workers. This makes it necessary to change the law. Some of the popular demands of labor unions are the necessity of green jobs, public education, women’s and children’s issues and most importantly, wages and benefits. The labor organizations put forth the statistics that 51% of the employers were threatened by the company of closing the worksite, in case workers exercise their right (Bronfenbrenner, 2000). It has also been found in various studies that 91% of the employers make employees to attend intimidating meetings (Mehta and Theodore, 2005). The proposed EFCA will benefit the workers in more than one ways. The rule of stricter penalties will provide more protection for workers’ rights. The law of interest arbitration will help unions prevent unnecessary delays in getting the first contract. Currently companies have a tendency to delay and continue the process of first contract for a long period of time. The use of interest arbitration will help reduce the frustration caused by this. The organized sector also says that the current company-oriented procedure encourages the companies to pressure workers to impact their choices. Presently, it is not necessary for companies to respect the workers’ signed authorization forms and may insist on conducting a ‘secret ballot’ for the same. It is often argued by the laborers that the secret ballot is secret in name only and companies often harass the employees who try to support unionization. Labor unions also call upon the fact the growing inequality in the payment of the senior managers and the ordinary workers. They cite that in spite of an increase in the worker productivity, the buying power of the ordinary middle class has gone down. In tough economic conditions like these, the CXOs receive huge amount of Dollars as bonuses, but continue lay-off and fire lower level workers. The organized labor argues that the enactment of EFCA will enable formation of healthy and powerful unions and stop these practices. The proponents of the Act argue that the penalties that are presently given out by the NLRB are very small, and companies do not have major downside. Increasing the penalty will lead to a decrease in unfair practice by the companies. A Case Study by Nissen (2008) that examines the union busting in a nursing home facility found that if EFCA had been in effect during the incident, the rights of the workers would have stood protected. The Bill also finds a supporter in the form of the US President: Barack Obama. An initiator of this bill, Obama is of the belief that the current organization practices deny a worker the right to organize. He believes that EFCA will help the workers in organizing freely without any fear. Presently, companies are under no legal obligation to accept the singed decision by a majority of the workers. The Opponents In spite of support from various quarters of the society, the EFCA finds its biggest opponents in the form of Corporate Houses which view the Act as unconstitutional and inappropriate on many fronts. Leo Scott, the CEO of Wal-Mart, which is a large opponent of unionization at the workplace, has said “We like driving the car and we’re not going to give the steering wheel to anyone but us” (Associated Press, 2008). Critics argue that the use of card-check system for election will result in explicit force by union organizers (National Association of Manufacturers, 2009). It is also argued that the use of such a system will result in an infringement of the employee privacy. The Opponents of the bill also argue that the arbitration proposal of the Act is an inappropriate intrusion of the Government in the procedures and policies of a business organization. Critics also argue that the law may lead to walkouts by management in order to force the union to accept the company’s proposals before the 90 day deadline. Opponents of the Act also say that a ballot case in private is a better picture of an employee’s preference rather than public letter that is known to the employees as well as the union organizers. Critics also point to the possibility of a 51% workforce support for a union without even talking to the number of employees. This will make it as the certified bargaining representative for the work force. The EFCA’s interest arbitration provisions have also been cited as being unconstitutional by many critics. They state that the Act creates a very demanding law making authority with the Federal Mediation and Conciliation Service. Apart from this, the result declared by the arbitrators is not under review by any third party. Mid and small sized companies which lack the necessary in-house expertise on human resource management also oppose the Act saying that the enactment of the EFCA will lead to an escalation in the costs of collective bargaining for them. Author’s Opinion It can be seen that EFCA has got both strong arguments in favor as well as against. This section deals with the author’s viewpoint of the arguments. The claim of union organizations that companies often resort to illegal firings in organizing drives can’t be substantiated with statistical facts. It has been found that the cases of illegal firings in 2007 were a mere 2.7% of the organizing election campaigns that took place in that year (Wilson, 2007). The claim of Labor Unions that the use of card-check will put an end to the practice of threatening by company management has also some intrinsic flaws in it. Such threats from the side of employers are already considered as illegal and may be raised by the union organizers. On the other hand, it can also be argued that the country is facing a downtrend in the levels of blue-collar jobs, and an uptrend in new white-collar jobs. These jobs provide miminal health care benefits, and very less job security. Various surveys have also pointed out to the fact that a large 50 Million non-unionized American Workers have not joined a union because of the threat of possible repercussions from the management. If given an option, these people will definitely be willing to join a union. Conclusion Based on the analysis, the EFCA in its present form requires subtle modifications to be in the best interest of the working class and the society. To say if the Act will become a law depends on the power balance between the two parties. At present the weight of the proponents seems to be heavy with the support of Obama. A complete implementation of the Act shall be preceded by a constitutional validity test of all the aspects of the proposed Act. Overall, this exercise has given the author a very clear picture of the EFCA. References Associated Press. (November, 5, 2008). The Associated Press. Retreived from: http://www.businessweek.com Bronfenbrenner, K. (2000) “Uneasy Terrain: The Impact of Capital Mobility on Workers, Wages and Union Organizing,” U.S. Trade Deficit Review Commission. Mehta, C. and Theodore, N. (2005). “Undermining the Right to Organize: Employer Behavior During Union Representation Campaigns,” Center for Urban Economic Development, University of Illinois at Chicago, Dec. 2005. National Association of Manufacturers Prosperity Project. Tell your Member of Congress to Oppose the “Employee FORCED Choice Act” or Card Check Legislation in Any Form! Retrieved on August 19th, 2009, from: http://www.bipac.net/issue_alert.asp?g=NAM&issue=Card_Check&parent=NAM Nissen, B. (2009). Would the Employee Free Choice Act Effectively Protect the Right to Unionize? Evidence from a South Florida Nursing Home Case. Labor Studies Journal, 34(1), pp: 65-90. The Library of Congress. (2007). Employee Free Choice Act (Introduced in House). Retrieved on August 18th, 2009, from http://thomas.loc.gov/cgi-bin/query/D?c110:1:./temp/~c110LSSIZf:: The Oyez Project, NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1 (1937) Retrieved on August 18th, 2009 from http://oyez.org/cases/1901-1939/1936/1936_419 Read More